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VAM USA LLC will build an $81.6 million facility
YOUNGSTOWN
Construction on an $81.6 million steel-pipe threading plant by a Vallourec Star sister company is expected to start next month.
The city’s board of control approved an agreement Thursday with VAM USA LLC for the facility in the Ohio Works Business Park at the request of the company.
VAM USA’s co-owners Vallourec, Nippon Steel Sumitomo Metals Corp., and Sumitomo Corp. decided late Wednesday to approve the deal, said city Finance Director David Bozanich.
“They want to start right away” with construction, said Mayor John A. McNally. “This is good news for the city.”
The final deal worked out with the city calls for VAM to invest $81.6 million — it originally was $81.5 million — and hire about 80 workers to start — it originally was 84.
This plant will be about a mile from Vallourec Star’s $1.1 billion expansion mill that opened in October 2012.
“We’ve shown the city can put together big projects,” Bozanich said. “We’re going to continue our efforts in this area.”
McNally added that he hopes “this is not the last of the announcements” as VAM and Vallourec Star have “significant room for expansion” at their locations.
The Vindicator first broke the news Jan. 14 that VAM was giving serious consideration to opening the threading facility at the former Genmak Steel building and the surrounding property, and that a decision was expected in 90 days.
It took less than 60 days for the decision to be made.
However, VAM declined Thursday to comment through a local spokesman.
Work is expected to start next month and be done by September 2015, according to the company’s agreement with the city.
VAM’s workers will pay about $79,750 annually to the city in income taxes, according to VAM’s tax-abatement application, which also lists annual payroll at $2.9 million.
About 150 to 200 construction workers are needed for this project, Bozanich said.
The deal with the city calls for VAM to get a 10-year, 75-percent real-property-tax abatement, a $369,000 water and wastewater grant for infrastructure and a retention pond to prevent flooding, and not requiring the company to pay water and wastewater tap-in fees and permits.
The company is paying $364,548 to the city for 27 acres owned by the city contiguous to where the VAM plant will be built. VAM spent $3.1 million to purchase 10 to 12 acres on Ohio Works Drive that includes the former Genmak Steel building and two vacant adjacent parcels.
U.S. Rep. Tim Ryan of Howland, D-13th, said, “These investments don’t happen by accident; they are the result of hard work by people at all levels of government and private industry. This is yet another example of companies looking at the Mahoning Valley and finding it to be a perfect place to build and grow their businesses.”
Ryan pointed to an initial $20 million federal stimulus grant given to the Vallourec Star expansion project in March 2009 for rail improvements and line relocations as what “led to the public-private partnership and the building of the” mill. Only $16.74 million of the grant actually was used.
However, Vallourec officials have said that though money was a benefit, the project would have proceeded without it.
JobsOhio, a private organization created by the state to act as its economic development agency, is providing $300,000 to the city for work needed at the VAM location.
“As with most development opportunities, VAM USA officials had been considering multiple locations for the new facility, so we’re pleased they chose our community once again,” said Sarah Boyarko, Youngstown/Warren Regional Chamber vice president of economic development, North America. “The company’s ongoing investment speaks volumes about their commitment to the Valley.”
U.S. Sen. Rob Portman, a Republican who’s toured Vallourec Star’s new mill, called VAM’s announcement “welcome news for Ohio workers.”